The Portuguese economy is on track to grow by 1.2 percent this year, the Bank of Portugal says in its latest Economic Bulletin.

The country’s central bank raised its forecast for this year’s growth from 1.1 percent in October.

Portugal’s gross domestic product should grow by 1.4-percent next year “stabilising its growth rhythm to 1.5 percent in the two following years”.

“Taking into account the persistency of structural constraints to the growth of the Portuguese economy, it is crucial to deepen the process of structural reforms in order to increase incentives for innovation, mobility of productive resources and investment in human and physical capital,” the bank says.